Define and Discuss

Calendar Year, Accounting Period, And Fiscal Year
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A calendar year is the 12-month long duration that starts on the first day of January and ends on the last day of December, according to the popular Gregorian calendar. Many organizations and governments utilize the calendar year as the basis for computing taxes payable and taxes receivable. According to Investopedia (2003), the calendar year is popular globally as some of the big companies such as Facebook, and Google all use the calendar year to prepare their financial statements. The calendar year is preferred by many firms due to its simplicity since it matches with the Internal Revenue Service’s (IRS) tax reporting period. On the flipside, the calendar year is not suitable for seasonal businesses that are profitable only for a certain period of the year. An accounting period, on the other hand, refers to the period of time for which a number of financial statements cover. In other words, it is the range of time over which accounting operations are conducted, summed, and evaluated. Accounting statements from a given accounting period are usually useful to investors because they allow for comparison between two or more accounting periods. For internal purposes, the accounting period is normally one month. Additionally, public corporations are required to submit financial statements to the authorities after every three months, which means the obligatory accounting period is a timespan of three months.

Lastly, according to Investopidia (2015), a fiscal year is the range of time that a business entity or the government uses to report accounting statements and it may or may not correspond with the calendar year. It is the timespan from when the accounting starts to when it ends. For instance, an institution’s fiscal year may commence on March 1st and conclude on the last day of February.
References
Investopedia. (2003, November 16). Calendar Year. Retrieved from https://www.investopedia.com/terms/c/calendaryear.aspInvestopedia. (2015, June 12). Fiscal Year – FY. Retrieved from https://www.investopedia.com/terms/f/fiscalyear.asp